EFFECT OF DEBT STRUCTURE ON PROFITABILITY TOOLS (ANALYTICAL STUDY: A SAMPLE OF IRAQI INDUSTRIAL FIRMS)

Abstract

This study aims to know the impact of the corporate debt structure on its profitability tools. The industrial sector firms operating in the Iraq Stock Exchange were selected as one of the important sectors as a community for the study. A sample of 10 industrial firms was chosen for the period (2014-2018), and the study problem focused That most firms suffer from high cost of capital as a result of the lack of prior planning to develop an optimal financial structure commensurate with its financial capabilities, by which the firm can reach safety through the use of a structure that includes the ratio of debt and equity from which the firm can achieve a higher rate of return From the cost of funding sources and with less risks, and then provide a theoretical and cognitive framework for the variables of the study, and use the descriptive analytical method, as the statistical programs (SPSS-26) and (Excel-21) were used to analyze the effect of independent variables (debt structure) on the dependent variables ( profitability tools) to reach a set of results by testing the hypotheses of the study whether they were accepted or not, Multiple regression was used to test the effect between the variables, and a number of conclusions were reached, the most important of which is that the debt structure has a positive effect if the rate of return for profitability tools(return on investment, return on equity and revenue power) is higher than the cost of debt for investments that were financed with debt. And vice versa, as she referred to a number of recommendations, the most important of which is paying attention to raising the debt ratio in the financial structure for the purpose of benefiting from tax savings and achieving higher returns than the cost of debt to achieve the optimal financial structure.